The difference between spot and contract trading might seem obvious for jaded traders, but trading terminology is a lot to get a hang of when you’re new to the game. SnapEx is more than just a derivatives trading site – it offers a variety of trading options to make your life easier. So, we’re taking a look at the difference between these two trading styles, so you can stay on top of things.
What is Spot Trading?
The spot price refers to the current market price of a security, cryptocurrency, currency or commodity. It’s essentially the price that is available when you buy immediately – so the value of an asset in the immediate sense.
Spot prices may vary slightly according to time and geographical locations, but the prices tend to be pretty consistent across financial markets. Their uniformity means that traders cannot take advantage of arbitrage due to major price disparities for the same asset, but in different markets.
Spot trading is, in essence, when you buy and sell assets at their current price. They’re most often considered in contrast to futures, however they’re actually inextricably entwined. Spot prices are a major factor when it comes to determining prices in the future, and can indicate fluctuations in future prices.
What is Contract Trading?
Contract trading is when two parties buy or sell contracts in exchange. Buyers will buy specific quantities at a predetermined price, time and place in the future. They developed from Forward contracts, and are a new type of trading that allows traders to buy and sell at exchanges and trading platforms.
The difference between contract trading and spot trading is that spot trading literally trades an asset, while contract trading is a standardized trade of certain commodities as underlying assets or financial assets.
The overall aim of contract trading is to find a fair price, and avoiding risks caused by fluctuation as in spot trading.
Contract Trading vs Spot Trading at SnapEx
SnapEx is a derivatives trading platform that allows users to trade cryptocurrency contracts. The platform is fully secure and offers streamlined trading in a modern environment, suited to the contemporary trader.
SnapEx allows traders to trade with 10x to 100x leverage, which adds an extra layer to their trading experience. Leverage acts as a form of credit, so you can make trades without putting all of your own capital in. For example, if you buy Bitcoin at $10,000, and put $1,000 of your own money in (with $9,000 from leverage) with 10x leverage, you’ll see a 10% profit (minus fees) if Bitcoin rises by only $1,000. That means you can see real returns, without having to risk too much of your own money.
Start Contract Trading at SnapEx
For a secure way to see great returns on your crypto trades, try contract trading at SnapEx. This platform offers streamlined trading in a secure environment that is suitable to novice and experienced traders alike. Crypto contract trading is the way forward – so give it a try.
Visit SnapEx To Start Trading Now – https://www.snapex.com/
Disclaimer: This post is a paid article. Readers should do their due diligence before taking any actions related to the promoted company or its affiliates or services.